The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Good discussion. I also talk enjoy seeing how others have come to their valuation. This weekend I am going to the and work out a PFS for the diffident deposit areas.
Regarding valuation methodology I found a brilliant (a little complex at times) video on you tube. It’s an hour long but really informative. Explains different methods I value producers, developer, explorers and gives some good watch outs for the junior penny dreadfuls. :)
https://m.youtube.com/watch?v=qk6Z3WINuSQ
I understand anxiety about the stubbornly low share price for Investors who bought in north of 20p
What methods are people using to determine target for sp?
Net Asset Value (multiple against benchmark)
Future cash flow
Wealth Creation IRR
If you have a method to determine share price value should help anxiety.
At market cap £700 million and 4 Billion shares using only the PFS theres an amount of good will baked into the share price especially when assessed through risk transition which market discounts ~17%
You could say the sp is pushing its current sp.
however we know the PFS is just a small section of SE crescent
It would be really good to have an assessment of resource size for the different zones of Havieron. Using average grade assumptions from drilling to date.
This numbers could be used for multiple PFS type data to help determine value.
Inflection points:
Discovery at another location
resource size upgrade (adds years to reserve life)
Plan to increase milling rate Mtpa
I’m good where we are, recognise that drilling, drilling, drilling is required to grow the resource and hopefully find another deposit
Always interested to hear how others are valuing GGP.
The drill results get better and better.
The decline is progressing at an incredible rate.
Any dips in share price now have become an even bigger discount.
Don’t expect too much tonight. NCM control the flow of news I see potential divergence in comms between GGP who will want to convey bullish opportunity and NCM who will be more cautious to moderate gains in GGP sp.
Everything is progressing nicely at Havieron.
The re-rate will come in good time.
Always want to make people happy.
Creswick is going to have a mine on it, Adam said so. Fosterville
That’s where the mother load of gold is and anyway if it’s not there in sufficient quantities or grade It’s ok because we can get the gold from Queensland and truck it to creswick the short 1250 miles. And if it’s not there we can buy some more land and find it there. Fosterville
The drill results will be any day now they’ve been drilling day and night for months. Kirkland Lake Gold
Fosterville
Watched interview where Craigy baby said news flow of results through the rest of the year, OK that was in June but they’ve got to get internet sorted at the bungalow. Kirkland Lake Gold
It’s all going to be awesome. Fosterville
Oh and I don’t like Cherry’s anyway but I love Captain Kirk, land, lakes and gold.
ECR to the moon! Have the faith and believe. Fosterville
Echo chambers are great.
GLA
OK
Maybe I should have ramped the share to narrow my losses and sold out when others had bought in.
You’d be happy then right?
There is nothing I am saying that is unreasonable and you know that.
You say that the company communicates clearly, really?
How about when CB said there was had no intention to raise capital through share placing and then proceeded to do exactly the opposite?
Come on don’t be a mug.
Good luck to you.
An unresponsive Board of Directors is a red flag for me.
They work for the share holders. Why would they not want to engage if they had a compelling story and sound thesis.
The usual PR channels will not hold them to account it’s incumbent on shareholders to do so and get answers.
Alternatively could bury head in the sand, do some kind of gold rain dance and pray.
Yes there is an element of luck in exploration but it’s not all luck. It seems logical to look for quality Managment with proven track records which are relevant to the task in hand. Someone who has worked for a large corporate multinational producer in South America may not best fit for a junior explorer in Australia.
Very different skill set. I like people who have experience in the jurisdiction and a track record of success.
The gold mining sector is beaten up right now, its a great time to set the bar high and go for quality.
Regarding GGP Calum Baxter Geo had a clear thesis and relevant experience in the Paterson used in combination with a sound exploration methodology
There are many 1000s of juniors and the number of significant new discoveries amount to a handful per year to put some perspective to chances of success.
Take a look at GDXJ, Sprott junior explorer ETF to see the long list of companies that investment managers who live and breath this sector are invested in.
Get on the phone or email your CEO ask them what the hypothesis is and how they plan to test and prove it. What is the question they are trying to answer next?
If they don’t know or can’t answer the question, you do have to ask why that company deserves your money.
Genuinely wish you all the luck in the world, just improve your odds with some research.
Let’s forget Cherry Tree, one dud doesn’t define a company.
Does anyone want to share historic drilling results from Creswick and Bluemoon?
The world of exploration is littered with uneconomic high grade small quantity nugget type deposits. Need a lot of nuggets to justify capex and AISC investment for a mine
Beware companies reporting phenomenal drill intercepts 50g/t less than a meter (very narrow intercept) surrounded by <0.5g/t grade.
Do we agree that as things stand today there is no know defined resource at any of ECR tenements?
And the company is in that position 5 year after CB took over.
A serious amount of drilling is needed to:
1. Find a meaningful deposit
2. Prove JORC initial resource. PFS
3. Define resource Infill drilling BFS
Plenty of hope, and belief, you decide if the board and activity over the last 5 years gives you confidence they have the right expertise and approach to succeed.
The upside potential is huge but downside is not to be overlooked. Let’s hope they find an meaningful ore body somewhere on one of their land holdings.
Agree with you Paul. Let the trend be your friend.
I like to watch hanke-cofnas gold sentiment indicator and GDXJ as leading indicators.
https://www.thegoldsentimentreport.com
Don’t want to tempt fate but gold is looking increasingly bullish. Nice move today on persistence of inflation fears.
A close today above 1812 would be a very strong signal. 1834 next test.
Trend isn’t broken yet but looking it’s very encouraging.
Mentalmax if you take that as arrogant or patronising that’s on you. Expertise is essenatial in all industries it would be foolish to think anyone can interpret geology and the contextual interpretation of drilling intercepts. I don’t claim to be able to do so but have a network of geologist I turn to help.
Why am I here? Because I would like to share what I’ve observed and encourage people to do their own research and be critical. The junior mining space is very competitive with 1000s of companies trying to attract PIs money. Picking the best i amongst all the noise is a very difficult thing to do.
Good luck to you and all.
As things stand it will be a miracle for them to get to 100,000 oz resource never mind 1Moz which is level that majors would sit up and take note.
Remember CB took over toward end 2016, it’s going to take them years of exploration to hopefully find and define any meaningful JORC resource.
Then pre and banking feasibility study Capex cost to build mine multiple $100,000s and AISC to extract ore.
Anyone can Do a rough calc:
Annual au production x price of gold - cost of capital fiancé + AISC = profit.
Odds are really stacked against them unless or until they return a significant discovery drill intercept of >120 meters at 1.5g/t for an open pit or >15 meter >8g/t at depth for underground mining.
Said it before this was my biggest mistake and lesson in junior gold investing.
Recognise where we are in a cycle, all boats rise with a rising tide. The good the bad and the ugly.
Keep your eyes and ears open to recognise spin, bluster and no substance.
Take the time to do some research.
Go to company web site look under investors section at shareholding’s, research notes and financials.
Are any large institutional investors invested or is it nominee accounts of PIs
Does the Board have significant skin in the game?
3 Research notes, from 2016 to 2021 review them all. How much progress has been made? Take a look at the drill highlights in March 2021. If you don’t have skill to distinguish good from bad, should be a wake up call to get some expert help.
Financials
How much cash is going into exploration versus SGA (marketing and salaries).
Apologies. Newcrest used $1500 GGP $1750 and Hannam and Partners (broker) $1850.
I’d read the $1850 in broker note and assumed everyone had used the same. Silly me
The wedge is narrowing gold breaks 1850 and holds with higher highs = bullish.
drop through 1750 with lower lows = bearish
The commodity could trade sideways between this values = neutral
Newcrest used $1850 gold in the PFS, time will tell which direction we go, but there’s plenty of profit for Gold producers at these prices.
I’m definitely bullish over the medium/long term.
Crypto is certainly taking money which would have otherwise gone into precious metals.
I’m like most on here, I really don’t like the concept of crypto just doesn’t make sense and have never had any interest in it. I like precious metals, own physical (not as investment but insurance for a crisis situation).
Ive reassessed my goal?
I want to achieve financial independence which will give me and my family choice about what we do for work, where we live and how we spend our free time.
I have a £target to achieve this goal.
So I’m Diversifying my portfolio (I am NOT going all in on crypto, recognise the high volatility) but diluting my significant position in one asset gold.
What if gold trades in a sideward pattern for next few years and I have >70 of my portfolio pegged to that. I don’t know what will happen but I’ve watched enough interviews of “experts” predicting financial collapse since 2000s which hasn’t happened but constantly preach “this time”
When watching interviews from people who sell precious metal, just remember it is possible there’s a bias in what you are being presented.
I made a comment on one such accounts which challenged what the expert was saying and my comment which was respectful but stating an opposite opinion with a reference was deleted before I was able to post comment. Alarming that they don’t want to hear any differing opinion.
These promoters who have a vested interest in promoting commodity typically refer to QE as brrrrrrrrr print which is actually nonsense. Be objective and try search out opinions from all sides of an argument, you can then make an informed decision.
recognise that nobody knows what the future holds.
I’m still in GGP, really looking forward to the next 3 years as company grows or is taken out by a major.
Good luck to all ????
Monty. You are spot on, it’s a common misconception that QE is money printing when in reality its creation of bank reserves.
Debt is always ultimately deflationary.
I spoke with an investment manager yesterday and the conversation has made me rethink my approach.
Falling in love with and asset or stock should be an anathema to successful traders. It’s critical to be objective, understand cycles and developments/ factors which change the thesis.
Nobody can have any doubt after this weeks crypto action. Bitcoin has broken all time high double top. Like it or not (and I previously have not liked it) crypto is certainly taking money which would previously have gone into gold. This makes assessment on previous charts difficult as crypto becomes increasingly disruptive to previous flows of money.
Unfortunately gold is a analogue commodity in a digital world.
This is now indisputable, we gold bugs must acknowledge reality rather than living in denial convincing ourselves that the only safe haven inflation hedge is precious metals. Today it is not and as much as we know crypto has no intrinsic value the market is screaming we don’t care.
I am starting to rebalance my portfolio diluting exposure to gold. Not fully divesting, I am long gold miners/juniors explorers but can no longer sit on the sidelines watching crypto breakout, burying my head in belief one day gold will come good. If money is not flooding into gold now, I don’t know what the catalyst will be for this to change. Also
I have 5% in physical gold, 70% gold stocks going to lower my exposure to 5% physical and 15% gold stocks. Keeping some exposure in GGP and 2 Md tier Australia producers, sold all other AIM juniors.
No advice just adjusting to new market dynamics, crypto is here to stay and explains why gold has struggled to break out.
The advisor said I’ve made the mistake of falling in love with an asset and stock, let my heart rule my head.
The times they are a changing, it’s time to start making profit.
Unfortunately I have 300,000 shares invested. This was my investment mistake, we all have them on our journey. Jumped in on hype, without doing proper DD. Painful but good lesson. I certainly wouldn’t touch it with a barge pole now. Some folks in my position would ramp to try increase sp to minimise loss and get out. I don’t want to do that, would prefer to share my lesson would encourage people to make sure they research properly before parting with hard earned money. I watched an interview with Rick rule where he was describing the penny dreadfuls, lifestyle boards taking a wage and delivering very little in terms of a resource.
Sound familiar?